What Rising Construction Costs Mean for the Seattle Real Estate Market
Construction costs are rising. For anyone who follows Seattle real estate market trends (or trends on a national and global scale), this is not news. For the last few years, the COVID-19 pandemic has put pressure on supply chains as labor shortages, shipping delays, and factory closures have left demand high and supply low. Price growth has followed.
Like every major city around the world, Seattle, WA has felt the effects. In the nonresidential market, there was a 5.04% yearly increase in material prices from Fourth Quarter 2020 to Fourth Quarter 2021. Lumber prices went up 78% over the past year, while copper and PVC pipe were up 67% and 105% respectively.
As the Puget Sound Business Journal reports, with these kinds of construction cost increases “the margin for error is so razor thin right now that even a major weather event hitting an area with a PVC plant will send a ripple effect through the market, further affecting the supply chain.” Those ripples can quickly affect tenants as they see prices skyrocket for tenant improvement custom build outs.
But there’s also good news for commercial office tenants, building owners, and developers as we look toward the future of Seattle’s real estate market.
The newly-passed infrastructure bill will focus greater support on streamlining supply chains with much-needed improvements to the nation’s roads, ports, railways, and airports. This will help calm the natural inflations that cause price increases year after year, while making it easier to access necessary construction materials.
It is likely to be a while before the Seattle market sees the direct benefits of this bill reflected in construction costs. However, there are steps that local real estate companies—Martin Selig Real Estate (MSRE) a leader among them—are taking now to ease the pressures of the market and keep rental prices down for corporate and residential renters in Seattle, WA.
By choosing to rent from one of MSRE’s properties, you will not have to be as concerned about fluctuations for construction costs. MSRE has an in-house construction team that works on tenant improvement custom build outs for both stabilized buildings and new developments.
Our in-house construction team and project managers lower costs by 20% (compared to working with outside construction teams) by streamlining processes and alleviating additional operating charges. We also realize lower operating expenses by offering all services (janitorial, garbage and recycling removal, HVAC, electrical, parking) on an in-house basis.
This provides tenants with a unique opportunity to find their ideal office space in the Seattle real estate market without needing to worry about how construction costs may be impacting the industry on a wider scale.